Northwestern Mutual Announces Investment Fund for Black Startups
Also, a partnership with gener8tor on an accelerator for Black startups.
Northwestern Mutual recently announced its commitment to invest $20 million in startups founded by Black entrepreneurs.
These investments will be managed by the company’s venture-capital fund, Future Ventures, which is partnering with gener8tor on an accelerator for startups founded by Black entrepreneurs.
The fund is looking to invest in companies where at least one founder, or the CEO, and at least 20% of equity ownership identifies as Black or African-American.
The promotional materials from NWM and gener8tor both noted that less than 1% of funding from venture capital outfits goes to Black-founded startups. The Washington Post has reported this statistic as well, noting it comes from a study by Silicon Valley Bank, a commercial bank based in California.
Similarly, a study called ProjectDiane initiated by investor Kathryn Finney found that only .2% of all venture capital funding went to startups founded by Black women. And another study by Deloitte and the National Venture Capital Association showed only 2% of investment professionals were black.
James Norman, the founder and CEO of Pilotly, wrote in the Harvard Business Review, “If you’ve only spent 1% of VC dollars, if we can only find 227 venture-backed Black companies (while more than 9,000 companies were funded in 2018), you can be sure that you have not even funded the best of us yet.”
It is in this vein, that the $20 million in venture funding and the accelerator were announced.
The accelerator is the first one from NWM and gener8tor that exclusively focuses on Black-founded startups. It’s a 12-week program, with two rounds a year investing $100,000 each into 10 companies annually.
At least one founder in the startup will be in Milwaukee for the accelerator, with access to offices at Cream City Labs — NWM’s co-working space. And it will offer mentorship and coaching from gener8tor staff, industry experts and investors.
John Grogan, NWM chief product and innovation officer, said the firm will continue to fund and provide resources to Black startups, saying “$20 million is only the beginning.”